The first objective of this application is describe the strengths and successes of the TrialNet Clinical Center at the Hospital for Sick Children/University of Toronto. The Toronto Clinical Center has shown a high level of recruitment for the TrialNet Natural History of the Development of Type 1 Diabetes Study through its highly capable investigators, Drs. Diane Wherrett and Jeffrey Mahon, providing expertise in diabetes, clinical trials and immunology of type 1 diabetes, its excellent coordinators, institutional support and resources, a productive Canadian affiliate network and extensive local partnerships in the Toronto area. Recruitment to this study ranks 4th of the 14 North American TrialNet Clinical Centers. This center has provided leadership in TrialNet studies: Dr. Mahon, chair of the Natural History Study of the Development of Type 1 Diabetes Study and Dr. Wherrett, chair of the Effects of Recombinant Human Glutamic Acid Decarboxylase (rhGAD65) Formulated in Alum (GAD-alum) on the Progression of Type 1 Diabetes in New Onset Subjects Study. It has contributed actively to all of TrialNet's studies to preserve insulin secretion in recent onset diabetes. The second objective is to determine the efficacy and safety of the incretin mimetic exenatide (Byetta(), alone and in combination with the anti-CD20 monoclonal antibody rituximab (Rituxan(), in patients with newly recognized immune-mediated Type 1 Diabetes. The proposal's primary objective will be to test the hypothesis that the combination of exenatide and rituxamab more effectively preserves endogenous insulin secretion compared to either drug alone. The primary outcome will be the area under the stimulated C-peptide curve (AUC) during a 2 hour mixed meal glucose tolerance test one year after study entry. The study will be placebo controlled and double blinded. The rationale for this proposed study combines the immunomodulatory effect of rituximab to reduce beta cell autoimmunity with the beta cell regenerative potential of exenatide to improve insulin secretion. Preserved endogenous insulin secretion has been found to be associated with reduced of rates of the diabetes complications of hypoglycemia, nephropathy and retinopathy.